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Actions General Motors should take to clean up its mess

Ignition recall exposes problems at GM and with U.S. auto safety net

Published: April 04, 2014 04:00 PM

CEO Mary Barra of General MotorsBarra testifies before a Senate Commerce, Science and Transportation Subcommittee.

General Motors' CEO, Mary Barra, was questoned this week in hearings before House representatives and senators over the automaker’s slow, and at times inappropriate, reaction to a known safety risk in many cars. Through the proceedings, more light was shed on the troubling situation, and it is clear that stronger actions need to be taken.

Details continue to emerge that reveal an ignition defect was identified more than a decade ago, yet the underperforming component was installed for years. As it was identified internally that there was a risk that cars could be unintentionally turned off, thereby deactivating air bags, and taking power from steering and brakes, a replacement part was eventually developed and deployed with the same part number. The shared part number has caused such confusion that GM can’t identify the models that have the old part or new one, and therefore the company had to recently expand its recall to more than 2.5 million vehicles. This was the right thing to do now, but it should have never come to this.

During the House hearing, GM documents revealed that an alternative design to meet the ignition requirements, thereby replacing the faulty components, was rejected for not representing an acceptable business case, and that the parts cost would have been just 57 cents per car. And yet, the company chose to avoid a recall. The cost since has been at least 13 lives.

Barra insisted that she represents a new GM, one that puts the customer first and focuses on safety. We hope that is true.

Consumers Union, the public policy and advocacy arm of Consumer Reports, thinks that today’s General Motors should be held accountable for the actions of the pre-bankruptcy company and that changes need to be made to provide further protections for consumers.

Consumers Union calls for:

GM to create a trust fund for victims

General Motors failed to disclose the extremely serious ignition defect while negotiating for immunity through bankruptcy proceedings. Technically, the 2009 bankruptcy filing absolved the “new” company of any liability for prior product safety problems. That’s why Consumers Union and other groups have sent a letter to Barra calling on her to establish a compensation fund for victims with legitimate claims for loss due to these defective vehicles. We have also endorsed a bill in Congress to require such a fund. GM has hired the attorney Kenneth Feinberg, who administered funds for victims of 9/11 and the Boston Marathon bombings, to advise the company on its options. GM has stated that it will do the right things, and Consumers Union believes that includes a firm commitment to providing a generous compensation fund.

GM to move quickly to repair consumers’ vehicles and provide loaners

Repairing more than 2.5 million cars could take months, and no consumers should be left with a defective vehicle as their only option. GM has promised that it will provide loaner cars for those who do not feel comfortable driving their recalled vehicles until they are fixed. GM should move quickly and efficiently to finish repairs and provide loaners in order to get these potentially dangerous cars off the road.

Congress must approve tougher standards for automakers

Lawmakers in Washington, D.C., have introduced several bills to reform the national automotive safety system. One such bill would require automakers to provide more information about deaths and injuries to the National Highway Traffic Safety Administration, which would have to make that information available to the public in a searchable, user-friendly format. Another bill would provide NHTSA the necessary budget for more inspections and oversight, and increase the penalties for manufacturers that violate the government’s safety standards. A third bill addresses the question of whether evidence of this defect had already surfaced in lawsuits against GM over the years, but the evidence may have been buried because of confidentiality clauses in the settlements. The legislation would prevent such confidentiality orders from hiding information that’s vital to health and safety from public scrutiny. We believe Congress should enact legislation without delay.

DOT to investigate how this problem went unaddressed

The Department of Transportation has asked its Inspector General to investigate NHTSA’s role in allowing this dangerous situation to develop. Among its duties, NHTSA exists to provide safety guidelines and serve as a safety watchdog. Through the DOT investigation, we hope the government safety net is tightened and provided with adequate resources to protect American consumers.